What is a good ACoS on Amazon?
There is no universal “good” ACoS. The right target is the product’s margin before advertising: if your margin is 35%, the campaign earns while ACoS stays under 35% and loses money above it. That threshold is called break-even ACoS. ACoS only compares ad spend to ad sales, so it cannot see referral fees, FBA costs, returns or product cost — which is why it is not a profitability measure on its own.
Why one target for the whole account is wrong
Accounts usually pick a number — 25%, 30% — and apply it everywhere. It is convenient and it is wrong for most of the catalogue, because products do not share a margin. A 45%-margin accessory and an 18%-margin appliance cannot have the same break-even.
Break-even ACoS, step by step
Take the product and strip out everything except advertising:
| Line | Amount |
|---|---|
| Sale price | $29.99 |
| Referral fee | −$4.50 |
| FBA fulfilment | −$5.20 |
| Returns and storage | −$1.75 |
| Cost of goods | −$9.80 |
| Profit before advertising | $8.74 |
$8.74 ÷ $29.99 = 29.1%. That is the break-even ACoS for this product. Below it, every advertised sale adds profit. Above it, every advertised sale costs you money — while still looking like growth in the sales chart.
When ACoS looks fine and you are still losing
ACoS is a ratio of two advertising numbers. It is blind to everything else. Three situations where a healthy ACoS hides a loss:
- The product’s margin is thin. 25% ACoS on a 20% margin product loses on every sale.
- Returns are high. The return happens after the ad spend. ACoS is calculated on gross ad sales; the refund never reaches it.
- Ad sales cannibalise organic. If the customer would have found you anyway, the ad spend bought nothing. TACoS is the measure that notices.
Checklist
- Do you know the break-even ACoS per product, not per account?
- Does your margin figure include returns and storage, not just fees?
- Are you watching TACoS alongside ACoS?
- When a product’s cost changes, does the break-even change with it?
Frequently asked questions
What is a good ACoS on Amazon?
There is no single number. The right target is the product’s own break-even ACoS, which equals the net margin left after every deduction other than advertising. A product with a 30% margin breaks even at 30% ACoS; 15% earns, 40% loses.
How do you calculate break-even ACoS?
It is net profit excluding advertising, divided by the sale price. Subtract referral fee, FBA, storage, returns and cost of goods; the remainder as a share of price is your break-even ACoS. It differs per product, which is why one account-wide ACoS target misleads.
What is the difference between ACoS and TACoS?
ACoS compares ad spend to the sales advertising produced. TACoS compares it to total sales including organic. A rising TACoS with a flat ACoS means advertising is buying sales you were getting anyway.